ISLAMABAD/WASHINGTON: Pakistan has been unable to secure a place on the schedule of the International Monetary Fund’s (IMF) executive board, at least until mid-December, for the approval of the staff-level agreement (SLA) and disbursement of $700 million.
Informed sources said the Ministry of Finance had been trying its best to seek a date in the first week of December to ensure approval of SLA with Pakistan for the first review of the $3bn Standby Arrangement (SBA).
They said authorities were pushing at all levels, initially for December 7, and later for a date any time before the Christmas holidays, for the executive board to take up Pakistan’s case before the year-end.
However, this does not seems like a possibility, at least till December 14. The executive board members would not be available in the last week of December and the first week of January because of Christmas and New Year holidays.
The finance ministry did not respond On Monday, the IMF updated the schedule of its executive board meetings. Excluding Kyrgyzstan’s case on Monday, there are about 12 countries whose cases, both Article-IV consultations and programme reviews, are on the executive board agenda until December 14.
The countries are Armenia, Bangladesh, Belgium, Benin, Cabo Verde, Congo, Côte d’Ivoire, Moldova, Rwanda, Senegal, Somalia, and Sri Lanka.
These meetings encompass various aspects, including Article IV consultations on economic developments and policies of member states. The board also reviews IMF assistance packages, such as the extended fund facility (EFF) it signed with Pakistan.
Normally, the IMF board of executive directors takes about a fortnight after the staff-level agreement for approval, unless there are some outstanding prior actions.
In Pakistan’s case, no prior action is outstanding for the first quarterly review. The IMF staff and the Pakistani authorities had reached a staff-level agreement on the first review on November 15 in Islamabad.
This meant for Pakistan to have access to SDR 528 million (around US$700 million) and its approval would bring total disbursements under the nine-month $3bn SBA signed in July this year to almost $1.9bn.
This was after a long time that a quarterly review with the fund remained smooth and culminated in the immediate announcement of an SLA as most of the quantitative targets had been complied with.
In conclusion, the IMF mission had called upon the authorities to return to the market-determined exchange rate and had highlighted risks that may arise because of geopolitical tensions, rise in commodity prices and difficult global financial conditions and advised the authorities to continue efforts to build resilience.
It also pointed out that timely disbursement of committed external support remains critical to support the authorities’ policy and reform efforts as the government was accelerating engagement with multilateral and official bilateral partners. Saudi Arabia had since rolled over a $3bn deposit well before maturity.
Published in Dawn, December 5th, 2023
